Indian TV subscription revenues 'could fall by up to 15 per cent' if must-carry rules change

Business - 23 Oct 2018

Author: Callum Murray

A proposal by the Indian government to change the
legislation relating to obligatory coverage of sporting events of national
importance on free-to-air television could cause a fall in sports broadcasters’
subscription revenues of between 10 and 15 per cent.

The estimate comes from AR Srivathsan, a senior analyst at Media
Partners Asia, who told Television Post that the proposal would give private
distribution platforms greater leverage in negotiations with sports
broadcasters.

He said: “With the proposed amendment to Sports Broadcasting
Signals Act, Star India, which owns the majority of key India-based cricket
covered in the act for the next five years, will be challenged to gain
additional value from DTH and cable operators during contract renewals. We
estimate a 10-to-15-per-cent negative impact on the quantum of distribution
revenues the broadcaster would have made on status quo.”

Under the Sports Broadcasting Signals (Mandatory Sharing
with Prasar Bharati) Act of 2007, rights-holders are obliged to share live
transmissions of such events with the state broadcaster.

The events include prominent matches of the Indian cricket
team, including one-day international and Twenty20 international fixtures,
selected field hockey, soccer and tennis matches, the Olympic Games and the
Commonwealth Games.

However, the Sports Act only applies to retransmission of
coverage on DD Sports, the sports channel of Doordarshan, the Prasar
Bharati-owned television network, on terrestrial and direct-to-home platforms.

Viewers in cable homes and without access to Doordarshan’s
terrestrial channels or DD FreeDish therefore still have to watch the events on
subscription sports channels, according to officials at the Ministry of
Information and Broadcasting.

In order to ensure the largest possible audience for the
major sporting events, there is a proposed amendment to section 3(1) of the
Sports Act to ensure mandatory sharing of the signals with “other networks,
where it is mandatory to show the Doordarshan channels as per the Cable
Television Networks (Regulation) Act, 1995,” according to a ministry notice.

Srivathsan argued that the value of sports rights other than cricket would also fall if private sports broadcasters are forced to share feeds with Doordarshan, even on private distribution platforms.

He said: “Having committed a spend of more than $4 billion on sports over the next five years, Star will be forced to rationalise spends to accommodate this impact. Media rights valuations for non-cricket properties will moderate as a result and it might start a vicious cycle of lower investments aimed at growth of non-cricket sports in India.”

Star holds rights to India's home matches and International Cricket Council events such as the Cricket World Cup in long-term deals.